Reflation Trade Is Renewed as Jobs Data Unleash Rate Hike Bets
- U.S. March payrolls increased more than most had expected
- Five-year note’s yield climbed to highest level in a year
Treasury losses gets a boost from U.S. jobs data.
Photographer: Angela Weiss/AFP/Getty Images
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The global reflation trade that fueled the biggest Treasury losses in decades got a boost from stronger-than-expected U.S. jobs data, causing the market to price in an earlier start to Federal Reserve rate increases.
In a holiday-shortened session Friday, the 10-year Treasury note’s yield climbed as much as 6 basis points to 1.73% before retreating to end around 1.72%. Shorter-maturity securities more closely linked to monetary policy expectations fared even worse, with the five-year note’s yield rising nearly 8 basis points to 0.979%, the highest level since February 2020. The two-year yield approached 0.19%, last seen in June.